By Peter Nurse
Investing.com - The U.S. dollar sold off in early European trade Tuesday amid optimism over the global recovery given positive news of a potential coronavirus vaccine as well as the further reopening of economies, prompting investors to edge out of this safe haven.
At 2:45 AM ET (0645 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.582, down 0.3%, EUR/USD rose 0.2% to 1.0922, GBP/USD gained 0.5% to 1.2240, and USD/JPY rose 0.2% to 107.87.
Late Monday, U.S. biotech company Novavax (NASDAQ:NVAX) said it has begun trials for a coronavirus vaccine in Australia. It expects preliminary results from the Phase 1 clinical trial in July, and upon successful completion Phase 2 will be conducted in several countries, including the United States.
Novavax is one of many drugmakers around the world racing to find a way to fight a pandemic that's infected over 5 million people worldwide.
This followed news that a drop-off in virus cases led the Japanese government to end its state of emergency, adding to the increasing number of countries that are reopening their economies as the course of the coronavirus slows.
Still, ranges are tight as the U.K. and the U.S. return from Monday’s holiday while investors keep a wary eye on the tensions between the U.S. and China and the protests in Hong Kong.
"Markets are caught between two conflicting currents," said Michael McCarthy, CMC Markets' chief strategist. "Rising tensions between China and the U.S. are raising concerns, while easing Covid-19 lockdown measures are fuelling growth optimism."
The Chinese yuan, a barometer of relations between the world's two biggest economies, firmed a bit to 7.1324, though it remains near a two-month low of 7.1465 hit on Friday.The Australian dollar was at $0.6580, up 0.5%, and the kiwi up 0.6% at $0.6136.